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Online Business Plan for Cake Business

Executive Summary

I use the characteristics of online business to understand customers well, to understand what marketing is, and to establish a PR strategy that fits the characteristics of the business.
I will look at what disintermediation is, how it has influenced lately, and how to apply it to a bakery business that is right for the times.
I will look at the types and characteristics of e-commerce models and which companies apply.
Learn clickstream behavior and learn how to apply it to your business.
Based on the above theoretical analysis, I will summarize the business feasibility of online bakery and the direction that OFU Bakery should pursue.
Unlike the traditional cake business, which is designed and tested to the characteristics of Baker, we aim to be a successful business with customized cakes that customers can design and choose according to their purposes and preferences.

List of Figures
Fig. 1 Move to online causes decline of travel agency jobs(Tucker 2010)
Fig. 2 Online and mobile banking(Fox 2013)
Fig. 3 Eight Key Elements of a Business Model(Kenneth C. Laudon & Carol Guercio Traver n.d.)
Fig. 4 Three strategies for an advertising-supported revenue model(‘ Electronic Commerce eBook: Gary Schneider: Kindle Store’ n.d.)
Fig. 5 Five Primary Revenue Models(‘E-Commerce 2017 (13th Edition): Kenneth C. Laudon, Carol Guercio Traver: 9780134601564: Books’ n.d.)
Fig. 6 A model of online consumer behavior(‘E-Commerce 2017 (13th Edition): Kenneth C. Laudon, Carol Guercio Traver: 9780134601564: Books’ n.d.)
Fig. 8 Online marketing communications: Typical click-through rates(‘E-Commerce 2017 (13th Edition): Kenneth C. Laudon, Carol Guercio Traver: 9780134601564: Books’ n.d.)

1. Introduction

I intend to enhance our understanding of digital corporations and highlight the business feasibility by combining customer designed cakes with digital companies.
First, I identify major advantages and challenges for digital companies, taking into account background knowledge, market performance, technological issues, and social consensus. In addition, I will examine what is the main case and analyze the problem.
Second, I will search for what business models are notable today. Then, by analyzing what new technologies have been incorporated into this business model, I will forecast the blueprint and social role of the future innovative digital corporation…
Third, based on the current technological feasibility, I will implement a simulation function to help customers place orders on the homepage. The goal is to create a database of customers’ personal information using Big Data and to implement an intelligent digital company tailored to individual customers with an artificial intelligence system.
Based on these technological possibilities, I will propose innovative business models of digital corporations according to the material, decoration, and purpose of customers.
Finally, it is different from the fixed classical cake business based on the ability and tendency of the baker, so that the customer can make a virtual cake by providing various design templates suitable for the main material and purpose of the product, And aims to implement a system that enables customers to check up on delivery.
Joomla(‘Control Panel – CloudBase 3 – Joomla Template – Administration’ n.d.) is used for the implementation of the home page. I want to understand the various advanced features of Joomla and implement the contents proposed by this project as much as possible.
Through this project, I will strengthen my competitiveness by combining innovative business of digital business with classical business, and I will examine some problems that need to be overcome.

2. Disintermediation Impact Analysis

The meaning of disintermediation is the non-existence of the market brokers.
Before discussing the on-demand cakes business covered in this proposal, it is necessary to examine the influence of related industries on the existing offline market as the online business becomes active.
It is necessary to understand what the impact of disintermediation is due to an online business for market, producer and consumer with several examples.

2.1 Evidence and An Impact of Disintermediation

Evidence of disintermediation today is occurring in many places. In the past, consumers were able to buy goods only through retailers, retailers through wholesalers, wholesalers through producers, but today, through e-commerce, producers and consumers are able to trade directly.
Here is an impact of disintermediation on travel agencies which is also good evidence of disintermediation. Before the internet was popular, the main task of the travel agency served as a contact point for travel arrangements between customers and service providers such as airlines, hotels, and car rental agencies. For example, in 1980, a travel agency was able to meet a family member who wanted to travel to Europe. The travel agency contacted TWA directly for accommodation and tour bus services for travel to Europe, and acted as a vendor for the “traveler’s certificate”. For the family, the travel agent was a “one-stop shop” for traveling to Europe. Travel agencies played a role as a kind of retail store, and airlines and hotels played producers. Travel agencies were very annoying to deal with these producers. However, with the spread of the Internet, it has become possible to provide online services to American Airlines and Saber, and the travel agency has been able to provide faster and more comprehensive services to many customers. As the web became active, services such as Expedia, Travelocity, Hotwire, and were able to enter into direct travel contracts for end users, without going through the travel agency, and the prices and services available were much more transparent than what travel agencies could offer (Almunawar & Anshari 2014).
Fig. 1 Move to online causes decline of travel agency jobs(Tucker 2010)
It depicts another impact of disintermediation on traditional banks. In the case of a traditional bank, it took a long time for a simple task, since the customer had to at least get the necessary documents from the bankbook or identification card to visit the bank and wait until the bank staff handled it.
Or how friendly the bank staff is, or how much the commission is for banking, was also an important component of banking transactions. Since most applications and transactions are managed by paper, there was a weak point in protecting customers’ information.
Due to the activation of electronic finance through the Internet, most of the disadvantages of these traditional banks are being solved.
Even Internet-only banks are emerging, threatening the existence of traditional banks.
While customers can easily solve the necessary tasks anytime and anywhere using their mobile phones or computers, the role of existing traditional banks is diminishing. This means that in the relationship between customers, bank employees, and banks, the position of bank employees, that is, classic banks, is diminishing, and digital innovation can be a good example of the disintermediation of banks (Schmidt, Hackethal & Tyrell 1999).

Fig. 2 Online and mobile banking(Fox 2013)

2.2  Disintermediation for Cake Industries

As I  have seen in a few examples, I can see that the activation of the web due to the diffusion of the Internet has evolved into various forms of electronic commerce. In addition, the relationship between the customer, the mediator, and the final service has been largely disappearing as the role of the mediator, allowing customers to enjoy more convenient benefits.
In line with this technological trend, if a disintermediation strategy is combined with a traditional bakery, a bakery of a new paradigm is possible. It can minimize the relationship between the customer and the employee, promptly reflect the customer’s wishes, increase the utilization of the store, and create economic benefits as well.
If you design and order a cake directly using your favorite materials through the homepage, you can reduce the effort of finding the product you want from the existing cake shop, Through the choice, I believe that I will have the competitive edge to further enhance customer satisfaction. It can be a business that takes advantage of disintermediation in the way that a bakery clerk accepts a customer’s request and delivers it to a baker, or only pushes the selection of a product without accepting a customer’s request.
3. E-commerce Business Model
Kenneth and Carol’s book(Kenneth C. Laudon & Carol Guercio Traver n.d.) defines eight business models for a successful business; Value Proposition, Revenue Model, Market Opportunity, Competitive Environment, Competitive Advantage, Market Strategy, Organizational Development, and Management Team.
Many people focus on Value Proposition and Revenue Model. In many ways, they are the easiest way to identify a company’s business model and present information for judging value. However, other factors are equally important when evaluating through a company’s business plan or business model, or when analyzing the reasons for success and failure of a business.(W. Chan Kim & Mauborgne 2000)
In this report, I will analyze the OFU cakes business by applying only the five elements of Value Proposition, Revenue Model, Competitive Advantage, Market Strategy, and Organizational Development.

Fig. 3 Eight Key Elements of a Business Model(Kenneth C. Laudon & Carol Guercio Traver n.d.)

3.1 Value Proposition

Value Proposition is a very important factor in representing the value of a company.
With value proposition, I can define how a company’s products meet any customer’s needs(W. Chan Kim & Mauborgne 2000). By developing and analyzing a company’s value proposition, I can explain why customers should choose their own products at this company and determine what is different from other companies’ products. Successful e-commerce value propositions for consumers should be products for individual consumers, reduce product-search costs, make purchasing easier, and deliver goods more comfortably.
For example, let’s look at a customer’s past buying a book. Most customers had to visit a store directly to inquire about the book they wanted, wait for it to arrive if the book was not in the bookstore, and then visit the store again for the purchase when the book arrived.
However, Amazon eliminates these inconveniences, allowing customers to easily obtain information about their books at home, and to receive their books at home.
In addition, through the e-book, customers made it possible to purchase books without waiting for delivery and expanded the concept of paper-based books more flexible.
In this respect, the OFU Bakery has added product simulation capabilities so that a customer can design the cake directly. It is designed to be customized by the customer according to the customer’s taste and to be able to simulate it on the homepage. By providing basic prototypes for various events such as birthday, entrance, graduation, and Easter, customers can prepare the basic form of the product they want to propose.
In addition, by linking with the shipper, customers can reduce shipping costs and share real-time information about shipments.

3.2 Revenue Model

The company’s revenue model is synonymous with the financial model. It tells how much the company sells, how much it makes profits, and how to make good returns on the capital invested.
Successful companies are not created by profit alone(Porter 2011; Sersland 1987).
The major revenue models for e-commerce include revenue models of advertising, subscriptions, transaction fees, sales and affiliate, and many companies rely on these major revenue models, but many other revenue models have been developed.
The key revenue models can be summarized as follows.
In the advertising revenue model, a company receives a commission from the advertiser for advertising services. If the viewing rating is high, higher advertising costs may be charged.
Yahoo makes a lot of money through the display and video advertising.

Fig. 4 Three strategies for an advertising-supported revenue model(‘ Electronic Commerce eBook: Gary Schneider: Kindle Store’ n.d.)
The subscription revenue model charges a subscription fee to access the content or services provided. In order to charge a successful cost in an online business, it is necessary to have functions such as copy protection and restriction of the number of times of viewing. Microsoft Xbox Live (video game), Pandora, Spotify, Apple Music (music), Scribd and Amazon Kindle Unlimited program ebooks), Netflix and Hulu (television and movies).
The transaction fee revenue model provides a marketplace such as e-bay and e-trade, which means that the supplier or the trading partners receive a fee for the transaction.
The sales revenue model is to raise profits by selling products to customers like Amazon. Many companies earn sales revenue on a subscriber basis.
The affiliate revenue model provides customers with special points when their customers purchase products from a particular company, and the company receives commissions. MyPoints is a representative company.

Fig. 5 Five Primary Revenue Models(‘E-Commerce 2017 (13th Edition): Kenneth C. Laudon, Carol Guercio Traver: 9780134601564: Books’ n.d.)
The OFU Bakery, the online cake business has the characteristics of a sales revenue model that sells products to customers. However, it is possible to design affiliate revenue models with other companies by providing points according to the number of product purchases.

3.3 Competitive Advantage

The company has a competitive advantage when a company sells goods at a lower price than its competitors, or supplies better products than its competitors(Porter 2011).
Perhaps these companies have good experience or skills or have patents that other competitors can not imitate. This is called asymmetries, and asymmetries have advantages over other competitors, allowing them to come to market with better products, faster than competitors, and lower costs.
The OFU Bakery is not a typical bakery by the skill or experience of a baker, but it allows the customer to select and design materials directly, and the customer’s request can be confirmed in real time through the simulator. This is the main asymmetries of the OFU Bakery.

3.4 Market Strategy

Marketing is about reaching new markets, spreading the company to new customers, and promoting products and services.
Market Strategy is a plan that is made to promote marketing successfully.
The OFU Bakery will utilize social networking sites such as Facebook and Twitter to enhance the satisfaction of customers and enhance the ongoing event to improve customer satisfaction.

3.5 Organisational Development

All enterprises, including new companies, must implement business plans and strategies efficiently through the organization. A variety of e-commerce companies and companies that want to apply e-commerce strategies are not able to maintain their competitiveness without such an organization(Kanter 2001).
In the case of OFU Bakery, unlike the classic bakery, it takes a variety of cake orders through the homepage, so it is necessary to maintain steady homepage. The rest of the work is almost identical to a classic bakery. However, since a cake is ordered by the customer to design and select the material, more various materials are required. As the business expands, manpower needs to be replenished first in material purchasing and inventory management. Other departments need to be newly established and staffed as needed, but with the expansion of sales, they will be considered according to the situation.

4. Clickstream Behaviour

Clickstream Behavior refers to all records of searching a site, staying a site, and moving another site for a consumer to buy something.
According to the survey of the customers who visited the internet wine shop, it was found that the route for purchase and the route for a simple visit are different(Buckinx & Poel 2003).

Fig. 6 A model of online consumer behavior(‘E-Commerce 2017 (13th Edition): Kenneth C. Laudon, Carol Guercio Traver: 9780134601564: Books’ n.d.)
The purpose of marketing is to convert buyers into sales customers.
Through marketing analysis software, you can collect data about each step of collecting, storing, analyzing and converting the shoppers into customers graphically. Through the marketing analysis package, business managers can see how people view the site, search E-mail, social campaigns, or offline printing and TV ads. Demographics, behavior, and geographic information. By knowing whether you are a shopper on your mobile device, Facebook, or Pinterest, you can help determine the so-called “inbound” link to your site, the best way to drive traffic to the OFU Bakery.
In a typical offline store, you hire a salesperson who has the ability to distinguish the buyer by distinguishing the visitor’s behavior in the store. It is also possible only by experienced salespeople to identify and assist some buyers who are looking for a specific product. In brick and mortar environments, shops employ salespeople who learn how to distinguish buyers based on store behavior. Some buyers seem to focus on finding specific products. Other visitors are “window shopping”. Skilled salespeople can distinguish and ignore these visitors. However, in a virtual shopping environment, there are no salespeople to perform this role.
Therefore, we should analyze the clickstream and develop the theoretically various types of store visits according to the buyer’s main goal and empirically test them. When clickstream data is analyzed using the visit history of a specific online store, the visit record is classified as a purchase, search, search, or knowledge building visit based on the search pattern in the observed store including the general contents of the observed page. Because shoppers are motivated by different purposes, they must respond differently to different marketing messages. This will categorize your visits so e-commerce marketers can identify buyers and design better-tailored promotional messages.
A customer’s homepage visit is categorized as a purchase, search, search, or knowledge build visit based on the in-store search pattern observed by clickstream, including the general content of the page observed by clickstream. The type of visit varies depending on the availability. As shoppers move by different motives, they must respond differently to different marketing messages. Because it is possible to categorize visits in this way, OFU Bakery can identify buyers and design more effective and customized promotional messages.
Not only the movement of members registered at the OFU Bakery but also the general visitors’ interest can be grasped. Based on this, it is possible to obtain information about the products to focus on and to set the direction to pursue in the future.
You can see where people are coming to the OFU Bakery, what the most popular cakes are, what visitors are searching on the site, what they are engaged in, Users can get information to convert or cancel shopping carts, as well as information about where they go when they leave the site.
You can suggest a new product or recommend a product that suits your customers by referring to the gender, age, address, and the birthday of the customer who purchases or connects.
By leveraging your clickstream behavior, you can turn your consumer’s clicks into detailed business insights that can help you grow your business.

Fig. 8 Online marketing communications: Typical click-through rates(‘E-Commerce 2017 (13th Edition): Kenneth C. Laudon, Carol Guercio Traver: 9780134601564: Books’ n.d.)
As shown in Fig. 8, many online advertising techniques are currently in use, but sponsorship advertisements through a variety of retailers are expected to work more efficiently in the OFU bakery.

5.Conclusions and Recommendations for the Business

5.1 Conclusions

As we have seen in some examples, the web activation of the Internet has evolved into a variety of forms of e-commerce. In addition, the relationship between customers, intermediaries and end services has largely disappeared as a mediator role, enabling customers to enjoy more convenient benefits.
By combining disintermediation strategies with traditional bakeries, a new paradigm of the bakery is possible. Minimize the relationship between customers and employees, quickly reflect customer wishes, increase the utilization of the store, and create economic benefits.
By designing and ordering your own cake using your favorite ingredients on the homepage, you can reduce your efforts to find the products you want in your existing cake shop.
Through clickstream analysis, you can see not only the movement of members registered in the OFU bakery but also the general visitors’ interest. Based on this information, it is possible to obtain information about the product and to set the future direction.
By referring to the gender, age, address, and the birthday of the customer you are buying or connecting to, you can suggest new products or recommend products that are right for your customers. Leverage click-stream behavior to turn consumer clicks into detailed business insights that help grow your business.

5.2 Recommendations

So far, we have seen many new technologies related to e-commerce. In addition, we have examined the improvements and future directions by combining the current theories and new technologies with the bakery market.
The OFU Bakery’s business seems to have a lot of problems to overcome in order to look at the business by its theoretical approach. Immediately, there is a difficulty in implementing a simulation function that can satisfy various tastes and tastes of the customer through the homepage, and collecting meaningful clickstream raw data for the cake and analyzing the meaning of the clickstream raw data to determine the direction of the business It is difficult to realize without expertise. I believe it is the most basic and important thing to do online, offline, to become a company that gives customers, trusts customers, and is an honest business.

6. Referencing and Appropriateness of Sources (LO-5)

Almunawar, MN, nabil almunawar@ubdedu b & Anshari, M 2014, ‘Applying Transaction Cost Economy to Construct a Strategy for Travel Agents in Facing Disintermediation Threats’, Journal of Internet Commerce, vol. 13, no. 3/4, pp. 211–232.
‘ Electronic Commerce eBook: Gary Schneider: Kindle Store’, accessed March 29, 2018, from <>.
Buckinx, WR & Poel, DVD 2003, Predicting Online Purchasing Behavior, Ghent University, Faculty of Economics and Business Administration, accessed March 30, 2018, from <>.
‘Control Panel – CloudBase 3 – Joomla Template – Administration’, accessed March 13, 2018, from <>.
‘E-Commerce 2017 (13th Edition): Kenneth C. Laudon, Carol Guercio Traver: 9780134601564: Books’, accessed March 27, 2018, from <>.
Fox, S 2013, ‘51% of U.S. Adults Bank Online | Pew Research Center’, accessed March 29, 2018, from <>.
Kanter, RM 2001, ‘The ten deadly mistakes of wanna-dots.’, Harvard business review, vol. 79, no. 1, pp. 91–100, 175.
Kenneth C. Laudon & Carol Guercio Traver ‘E-Commerce 2017, Global Edition eBook, 13th, Laudon, Kenneth & Traver, Carol Guercio | Buy Online at Pearson’, accessed March 14, 2018, from <>.
Porter, ME 2011, Competitive Advantage of Nations: Creating and Sustaining Superior Performance, Simon and Schuster.
Schmidt, RH, Hackethal, A & Tyrell, M 1999, ‘Disintermediation and the Role of Banks in Europe: An International Comparison’, Journal of Financial Intermediation, vol. 8, no. 1, pp. 36–67.
Sersland, DR 1987, ‘Competitive Advantage Creating & Sustaining Superior Performance (book)’, Transportation Journal (American Society of Transportation & Logistics Inc), vol. 26, no. 3, pp. 63–63.
Tucker, R 2010, ‘Disintermediation: The disruption to come for Education 2.0’, O’Reilly Radar, accessed March 28, 2018, from <>.
W. Chan Kim & Mauborgne, R 2000, ‘Knowing a Winning Business Idea When You See One’, Harvard Business Review, vol. 78, no. 5, pp. 129–138.
‘You Are How You Click: Clickstream Analysis for Sybil Detection | USENIX’, accessed March 30, 2018, from <>.

Appendix 1 Prototype Website

Prototype Website Checklist
(Please attach this filled checklist in the Appendix-1)

Online Business Name: OFU Bakery( OFU : Only For yoU)
Online Business Category: The company makes and sells cakes of all types to order by an e-commerce website
URL in 
Front-end and back-end
Joomla site Login details:
Username and
Username: uunzcl34
Password: tgZL90v4d2
Template Name: cloudbase3 
케익 만드는 동영상을 보여준다. 케익의 두께, 빵색상, 토핑 디자인, 메시지 등을 선택/작성할때마다 예상 디자인을 알수있게 한다.
각국(인도,방글라데시,한국,중국)의 케익 만드는 동영상 첨부: menu manager -. menu item type -> system link(Ext. URL)
Number of Pages visible and their Screenshots: (How many web pages are visible? Please also attach the screen shot of your developed page in the Appendix-1)
CHECKLIST Requirements
Joomla! website setup Properly setup in 
Template & Layout Relevant to the online business 
User friendly
Content Relevant to the online business 
At least 5 pages – Home,
                             About Us,
                             Products & Services,
                             Company Policies and
                             Contact page.
Menu & Links Relevant to the online business 
Linked correctly to the relevant articles

Appendix 2 Website Development Journal

Date of project activity Full description of activity Resource name and link time duration

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